Correlation Between Lucas GC and Manhattan Associates

Can any of the company-specific risk be diversified away by investing in both Lucas GC and Manhattan Associates at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Lucas GC and Manhattan Associates into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lucas GC Limited and Manhattan Associates, you can compare the effects of market volatilities on Lucas GC and Manhattan Associates and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Lucas GC with a short position of Manhattan Associates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucas GC and Manhattan Associates.

Diversification Opportunities for Lucas GC and Manhattan Associates

0.25

Correlation Coefficient

Lucas GC  Manhattan Associates

Modest diversification

The 3 months correlation between Lucas and Manhattan is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lucas GC Limited and Manhattan Associates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manhattan Associates and Lucas GC is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Lucas GC Limited are associated (or correlated) with Manhattan Associates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manhattan Associates has no effect on the direction of Lucas GC i.e., Lucas GC and Manhattan Associates go up and down completely randomly.

Pair Corralation between Lucas GC and Manhattan Associates

Given the investment horizon of 90 days Lucas GC Limited is expected to generate 1.92 times more return on investment than Manhattan Associates. However, Lucas GC is 1.92 times more volatile than Manhattan Associates. It trades about 0.0 of its potential returns per unit of risk. Manhattan Associates is currently generating about -0.18 per unit of risk. If you would invest  67.00  in Lucas GC Limited on November 28, 2024 and sell it today you would lose (10.14) from holding Lucas GC Limited or give up 15.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Lucas GC Limited  vs.  Manhattan Associates

Lucas GC Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lucas GC Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Lucas GC is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Manhattan Associates

Risk-Adjusted Performance

Very Weak

Over the last 90 days Manhattan Associates has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Lucas GC and Manhattan Associates

The main advantage of trading using opposite Lucas GC and Manhattan Associates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lucas GC position performs unexpectedly, Manhattan Associates can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Manhattan Associates will offset losses from the drop in Manhattan Associates' long position.

The idea behind Lucas GC Limited and Manhattan Associates pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..